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Saving Veterans Health Care

On Memorial Day, when the nation honors those who died in combat, it is especially fitting to contemplate how to preserve and strengthen the system dedicated to – and excellent at – providing comprehensive health care for military veterans. A new report highlights the threats facing that system, and how to mitigate them.

May 27, 2024

Privatization Warning
The American Prospect
April 11, 2024
By Suzanne Gordon & Steve Early

A VA advisory panel issues a red alert on outsourcing.

In response to cost overruns on care for nine million patients of the Veterans Health Administration (VHA), the Department of Veterans Affairs (VA) recently convened a high-level “Red Team…”

The panel of six health care leaders includes former VHA undersecretaries for health, ex-DOD officials with military health experience, and prominent health care system executives. …

Rarely has a group of inside-the-Beltway experts gotten to the point so quickly or sounded the alarm so clearly. In the report, obtained by the Prospect before its public release, the group unanimously concluded: “The increasing number of Veterans referred to community providers … threaten to materially erode the VA’s direct care system.” Without a course correction, they said, mass closures of VA clinics or certain services could ensue, “eliminating choice for the millions of Veterans who prefer to use the VHA direct care system for all or part of their healthcare needs…”

The cost of reimbursing the 1.7 million private-sector providers enrolled in the five-year-old Veterans Community Care Program (VCCP), which facilitates patient outsourcing, has “dramatically increased, rising from $14.8 billion in FY 2018 to $28.5 billion in FY 2023,” the report states. Referrals outside the VHA are rising by 15 to 20 percent per year and now involve more than 40 percent of all patients, who are getting at least some care in the private sector.

The Red Team members lay out a series of very concrete steps that VA leaders can take to address problems identified in the report. Many can be implemented without remedial action by Congress…

 Many can be implemented without remedial action by Congress. 

High on the list is that Veterans Affairs Secretary Denis McDonough revise the “drive time and wait time” standards that his pro-privatization predecessor Robert Wilkie implemented, and which are now bankrupting the VA.

As the Prospect has suggested for several years, the authors state that the VA could immediately save over $1 billion by making telehealth services count as access to care. Secretary McDonough himself said this should happen two years ago.

The report urges McDonough to go further, by conducting a more thorough revision of the Wilkie access standards. Right now, a veteran who has to drive a long distance for a medical appointment could show up at a private-sector facility across the street from a VHA hospital or clinic that could provide the patient with the same service.

To better manage overuse and misuse of private-sector services, the report recommends that the VA should replace its use of what are called standardized episodes of care (SEOCs). Currently, VCCP providers can deliver services that a veteran might not need, or that the VHA could provide following an initial VCCP visit. The VCCP can bill for a veteran’s initial visit to an orthopedist for back pain, and for X-rays or MRIs, and for physical therapy services, and for 20 sessions of massage therapy. No utilization review is applied, and the veteran is not sent back to the VHA, where these services may be available in a more timely fashion, at higher quality, and for a lower cost. This practice, the authors argue, should be jettisoned, and a more effective utilization management system developed.

Similarly, when it comes to controlling ER costs, the Red Team says the VA should make it easier for veterans to access VA ER care through telehealth, and “repatriate” patients back to the VHA for follow-up care once they have been stabilized. VA should also make sure veterans aren’t directed to VCCP ERs as their main option on VA websites.

Another critical recommendation is that VA initiate an “attraction campaign” so that veterans, VA staff, policymakers, and the public understand what reams of data confirm: The VA delivers stellar care to some of the nation’s most complex patients, more quickly and at lower cost than private-sector providers. Marketing the system’s remarkable successes, the Red Team insists, should be “a top organizational priority.” …

These would be welcomed by longtime advocates for veterans like Michael Blecker, director of Swords to Plowshares in San Francisco, 

“If the VHA collapses, we will see an increase in veteran homelessness, veteran suicides, veteran unemployment, and a host of other serious consequences,” Blecker predicts. “Plus, the nation will have lost its only model of comprehensive health care. We in the veteran community cannot allow this to happen.”


Comment by: Suzanne Gordon

Over the past decade, the outsourcing of VA care to the private sector has increased dramatically.  Market ideologues have helped the medical industry grab more and more taxpayer dollars as they’ve crafted, and then lobbied for, legislation that would drain the Veterans Health Administration of both funds and patients. HJM has covered these worrisome trends.

Now we see a call for action. The Red Team Report, referred to in the article above, and a follow up article – Is Denis McDonough a Slow Reader? – is perhaps the most significant challenge to VHA outsourcing. The authors are classic inside-the-beltway players not known for their anti-privatization positions.  Yet, they unanimously conclude that the VHA faces an existential threat – and by this they are not referring to something abstract or philosophical.

What has been most frustrating about following the Red Team story has been the response of the very VA leaders who commissioned the report.  The report provides the Biden administration with just the mainstream cover it needs to initiate a reversal of VA privatization.  And yet, instead of taking this opportunity, they are maintaining the course Republican privatizers, from John McCain to Donald Trump have charted.

Our hope in writing this article for The American Prospect and many others like it, is that healthcare reform activists and those concerned with veterans’ issues will pressure the administration to do what’s needed before it’s too late.  If the DoD (which is reversing the privatization of the military health system)  can do it, the VA certainly can – and must.



About the Commentator, Jim Kahn

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Jim (James G.) Kahn, MD, MPH (editor) is an Emeritus Professor of Health Policy, Epidemiology, and Global Health at the University of California, San Francisco. His work focuses on the cost and effectiveness of prevention and treatment interventions in low and middle income countries, and on single payer economics in the U.S. He has studied, advocated, and educated on single payer since the 1994 campaign for Prop 186 in California, including two years as chair of Physicians for a National Health Program California.

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